EU fine turns Panalpina operating profit into $43 million loss

The EU and Swiss antitrust fines of CHF59 million (US$64 million) levied on Panalpina resulted in a loss of CHF40 million ($43 million) for the Swiss forwarder in the first quarter of 2012.

Panalpina said in a statement on May 4 it will appeal the European Commission’s decision. “We believe the amount is not justified, which is why we are going to appeal the decision to the European General Court,” said Monika Ribar, CEO.

The logistics and forwarding giant reported a gross profit decrease of 3 percent for the first three months of 2012 to CHF364 million compared to the first quarter of 2011. Gross profit margin increased to 23.6 percent.

Volumes in ocean freight reached a record high and continued to outperform the market, while those in air freight suffered from a negative market and the profitability restoration program.

Panalpina said the Asia-Pacific region showed continued growth going into 2012, with first quarter gross profit reaching a new record of CHF78 million, a plus of 4 percent.

Latin America also recorded further growth. With currency adjusted, gross profit in this region was up by 2.4 percent at CHF40 million.

Weak consumer markets in the EMEA and North America led to stagnation in these regions, with CHF178 million and CHF68 million respectively.

Panalpina said the economic environment in 2012 remains volatile with low visibility. It expects the air freight market to decline in the first half of the year, with zero market growth for the full year. In ocean freight, market growth is pegged at 4 percent to 5 percent.